PLN seeks $30b in investment over 10 years<\/p>\n
Dadan Wijaksana
\nThe Jakarta Post
\nJakarta<\/p>\n
State-owned electricity firm PT Perusahaan Listrik Negara (PLN)
\nsaid on Tuesday it would need about US$30 billion in investment
\nover the next 10 years to increase its power generating capacity
\nby 20,000 megawatts (MW).<\/p>\n
PLN president director Eddie Widiono said on the sidelines of
\nan international energy conference the company needed to increase
\nits capacity to meet rising domestic power consumption.<\/p>\n
Eddie said of the total investment required, PLN would be able
\nto provide $9 billion to $10 billion and the government could
\ncome up with an additional $4 billion.<\/p>\n
\"The rest will have to come from private investors. That is
\nwhy we are in serious need of foreign investors to help us build
\nthese power plants,\" Eddie said.<\/p>\n
According to estimates based on the National Electricity Plan,
\nthe country will require an additional 23,443 MW of power by
\n2013, boosting the capacity of existing power plants to 54,528
\nMW.<\/p>\n
This calculation is based on a number of assumptions,
\nincluding average annual economic growth of 5 percent and
\npopulation growth of 0.9 percent.<\/p>\n
A lack of investment has been a major problem in the country's
\ncrucial power sector.<\/p>\n
Power shortages in the country have grown increasingly serious
\nover the past several years, as power demand has continued to
\ngrow while supply has remained stagnant due to a lack of
\ninvestment.<\/p>\n
PLN has said it will need to build at least 47 new power
\nplants and 14 high-voltage transmission lines over the next 10
\nyears to keep up with electricity demand, which is expected to
\nsurpass supply by 2005.<\/p>\n
Most of the new power plants will be built in Java, Sumatra
\nand eastern Indonesia.<\/p>\n
Andrew Steer, the World Bank's country director, told the
\nconference an enormous amount of financing was needed for the
\ncountry's power and energy sector, requiring the involvement of
\nthe private sector.<\/p>\n
Steer said that from 2004 to 2012, investment in the power
\nsector should reach $10 billion to $12 billion for power
\ngeneration, coupled with $4 billion to $7 billion in investment
\nfor the construction of transmission and distribution facilities.<\/p>\n
The World Bank has been actively involved in funding projects
\nin the sector, but private sector participation is required to
\nsecure the amount of financing required for the sector.<\/p>\n
Among the efforts being taken by the government to lure
\ninvestors is a plan to revoke PLN's right to a monopoly in the
\npower sector, which would pave the way for private power
\ncompanies to sell electricity directly to customers by 2008.<\/p>\n
Experts have said the government must improve the investment
\nclimate in the country by ensuring legal certainty, the sanctity
\nof contracts and security, and improving the implementation of
\nregional autonomy.<\/p>",
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